AirAsia Group 2017 outlook: faster expansion across portfolio as Japan & potentially Vietnam launch

The AirAsia Group is accelerating expansion at all five of its existing airlines in 2017 following a decision to acquire 22 more aircraft than originally planned. The group is confident it is now in a position to pursue faster - and strategically important - growth following significant improvements to its bottom line in 2016. However, such expansion could pressure yields and profitability, particularly as 2017 is shaping up to be a year of intensifying competition and increasing fuel prices.

AirAsia's original operation in Malaysia is accelerating growth in 2017 with at least eight additional aircraft, in a strategic response to intensifying competition. Thai AirAsia is now planning to add six aircraft in 2017, despite challenging market conditions in Thailand. The group's affiliates in Indonesia and the Philippines, which have shrunk their fleets the last two years as part of restructuring initiatives, are planning to resume growth with two and four additional aircraft respectively.

The group's youngest affiliate, AirAsia India, is also accelerating expansion in response to policy changes in India, and now plans to add six aircraft in 2017, for a total of 14. The newest affiliate, AirAsia Japan, finally aims to launch services in 1Q2017 and end the year with five aircraft. AirAsia is also considering launching an affiliate in Vietnam by the end of 2017, although no new JVs have yet been allocated any aircraft from the group's 400 strong order book.